July 27, 2006

 

CBOT Corn Review on Wednesday: Down on liquidation, no fresh fundamentals

 

 

Corn futures at the Chicago Board of Trade settled lower Wednesday as liquidation and lack of news brought no support to trading, analysts said.

 

September corn futures settled 3 1/2 cents lower at US$2.36 per bushel and December fell 3 1/4 cents to US$2.52 3/4.

 

No fresh fundamentals entered the market as selling offered enough pressure to keep prices down, sources said.

 

Continued concerns over dry conditions in the western corn belt were outweighed by rainfall overnight in parts of Iowa and east of the Mississippi River.

 

"While we still have some production concerns for the western corn belt, the central and eastern portions remain in favorable condition," said Shawn McCambridge, senior grains analyst at Prudential.

 

Unchanged midday weather forecasts increased the likelihood current conditions will continue, he said.

 

In the western Midwest, a chance of scattered showers in southeast Iowa and northern Missouri through Wednesday night may move into the east into Thursday night, said Joel Burgio of DTN Meteorlogix Weather. Scattered showers in the east could yield 1/4 inch-1 inch and locally heavier precipitation, he said. After the rain subsides, temperatures across the Midwest will continue in the 90s into early next week, Burgio said.

 

In the longer-term forecast, a cold front is expected to move through the Midwest next Tuesday through Thursday, bringing temperatures back into the 80s, Burgio said. He predicts scattered to widely scattered showers and thunderstorms in the corn belt during this time, he said.

 

Buyers Monday included FC Stonnee, which bought 700 December, ABN Amro bought 700 December, Fimat bought 500 December, O'Connor bought 500 December and UBS bought 500 September.

 

Sellers Monday included O'Connor, which sold 4,000 September, Man Financial sold 1,000 December, RJ O'Brien sold 1,000 December and FC Stonnee sold 900 December.

 

Fund selling was estimated at 5,600 contracts.

 

Oat futures settled slightly higher in a quiet trading session, a floor trader said. September oats gained 1/2 cent at US$1.95 1/2 per bushel and the December contract also gained 1/2 cent to US$1.99 3/4.

 

Ethanol futures settled higher in active trade Wednesday. The August contract settled up 1.6 cents at US$2.624 per gallon and the September contract gained 0.3 cent at US$2.613.

 

Thursday, the U.S. Department of Agriculture is expected to release the weekly export sales for the week ended July 20. Analysts expect sales between 600,000-850,000 metric tonnes. Sales for the week ended July 13 were 632,600 metric tonnes.